GoKawiilElon Musk’s lawsuit against Sam Altman will head to trial this month in an Oakland, California, federal courtroom, where nine jurors will settle a years-long dispute between the cofounders of OpenAI over the group’s founding mission. While spats between Silicon Valley’s most influential billionaires are notable in their own rite, former OpenAI employees and nonprofits have taken a special interest in this case because the ruling could influence how the world’s leading AI developer controls and distributes its technology.
The stakes are especially high for OpenAI’s corporate future, as a bad outcome in this case could negatively impact its plans to file for an IPO later this year. The ChatGPT-maker is racing against Anthropic and Musk’s SpaceX (which now owns a rival AI lab, xAI) to go public. Musk’s status as an OpenAI competitor—who could benefit significantly if the case goes his way—has raised serious questions about whether he’s the right person to bring it before a jury. A settlement out of court is still possible, though legal experts and people close to the case say it’s unlikely.
Here’s everything you need to know about Musk v. Altman.
What Is This Case?
Musk’s suit essentially accuses OpenAI of straying from its founding nonprofit mission: ensuring AGI, a highly capable AI system that can perform a wide range of jobs, benefits humanity. The defendants in the case are OpenAI, Altman, OpenAI’s President and cofounder Greg Brockman, and OpenAI’s biggest investor, Microsoft.
Despite generating billions of dollars in revenue, OpenAI is still overseen by a nonprofit today. Musk was one of the original cofounders of the OpenAI nonprofit and donated about $38 million to it during those early days, but he split off in 2018 after getting into disagreements with Altman and Brockman. Now, Musk’s lawsuit has been whittled down to three core claims against OpenAI.
The first concerns whether OpenAI breached its charitable trust. Musk alleges that in the early days of OpenAI, he believed he was investing in a nonprofit with a commitment to open source, or making its AI technology available widely for free download. However, Musk alleges that Altman and Brockman have not used his investment as he intended. OpenAI now has a for-profit arm that generates billions of dollars in yearly revenue, and the company is highly secretive about the code for its best AI models. (OpenAI alleges that Musk knew back in 2017 that the company would need a for-profit division, and even helped his cofounders set up the corporate structure.)
The second core claim is fraud, and specifically that Altman and Brockman deceived Musk about their intentions to turn OpenAI into a for-profit company. The third claim is unjust enrichment, which argues that Altman, Brockman, Microsoft, and other OpenAI investors have enriched themselves at the expense of Musk.
The defendants say Musk’s claims are baseless and that he is simply seeking to cripple OpenAI as he tries to build up xAI.
Musk is asking the court for a number of different remedies, including removing Altman and Brockman from their roles at OpenAI, returning the ChatGPT-maker’s “ill-gotten gains” to the company’s nonprofit, and blocking OpenAI from existing as a public benefit corporation, which its for-profit arm is categorized as today.
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